Exchange Business can be carried out by a person, whether natural or juridical, only if such person is licensed by the Central Bank in accordance with the Regulations and its subsequent amendments. This chapter provides information related to the process for obtaining an Exchange Business license from the Central Bank.

1. 3.1.1Any person, natural or juridical, may submit a new application to the Central Bank for any category of license mentioned under Paragraph 2.2 of Chapter 2 using “Licensed Person’s Application (LPA) Form” (Refer to Appendix 5 for LPA Form) and with necessary supporting documents;
2. 3.1.2All documents provided to the Central Bank as part of the application for a license must be in Arabic or English;
3. 3.1.3Documents in languages other than Arabic or English must be accompanied by Arabic or English legal translations;
4. 3.1.4All figures in the financial statements, business plans or other projected reports must be expressed either in AED or in US Dollars;
5. 3.1.5The applicant is permitted to appoint a duly authorised representative, such as a law firm or a professional consultancy firm, to prepare and submit the license application on behalf of the applicant. In such cases, the applicant continues to retain the full responsibility for the accuracy and completeness of information/documents provided and is required to certify the application form accordingly;
6. 3.1.6The Central Bank may liaise directly with the applicant or the applicant’s duly appointed representative when processing the application for seeking any clarification or information;
7. 3.1.7Applicants may contact the Licensing Division of the Banking Supervision Department for a pre-application meeting to discuss their business plans, application process and requirements;
8. 3.1.8The following forms and documents must be submitted to the Central Bank for obtaining a license:
   1. a)Formal application letter signed by the applicant(s) which must specifically state the category of the license for which they are applying (refer Paragraph 2.2 of Chapter 2 for various license categories);
   2. b)Duly completed LPA Form (Refer to Appendix 5 for this Form);
   3. c)Comprehensive business plan which must consist of the following information regarding the proposed entity:
      • •Name of the proposed entity;
      • •Legal form of the proposed entity;
      • •Initial amount of paid-up capital that will be injected into the business. Please refer to Paragraph 2.3 of Chapter 2 for the minimum requirements of paid-up capital;
      • •Name(s) of the Owner/Partners/Shareholders and the ownership structure;
      • •Justification and reasons for applying to obtain a license to conduct Exchange Business and the value it will add to the financial industry;
      • •Proposed number of branches and their locations that are planned to be opened during the first three (3) years;
      • •Projected financial statements (Balance Sheet, P&L and cash flow statements) for the first three (3) years with assumptions;
      • •Applicant's business strategy, business model, primary corridors if planning for remittance activity, description of proposed products/services and other marketing plans;
      • •An assessment report on the potential risks that may be faced by the proposed entity and suggested measures to mitigate such risks; and
      • •Emiratization plans in line with the Central Bank’s requirements.
   4. d)In case the proposed Shareholder(s) is/are a juridical person(s), a Board resolution from such juridical person(s), confirming the decision to become shareholder in the proposed entity;
   5. e)In case the proposed Shareholder is a juridical person, the certificate of incorporation issued by the competent authority in its country of incorporation, commercial license/registration or any other similar official document;
   6. f)In case the proposed shareholder(s) is/are part of a Group of Companies/Businesses, copies of the audited financial statements of that Group, for the immediately preceding three (3) years;
   7. g)A letter of undertaking from the Owner/ all Partners/ all Shareholders of the proposed entity to comply, in case the application is approved, with the paid-up capital and bank guarantee requirements stated under Paragraphs 2.3 and 2.4 of Chapter 2;
   8. h)Letter of undertaking as per Article 3 (d) of the Regulations;
   9. i)A Draft version of Memorandum and Articles of Association of the proposed entity;
   10. j)Duly completed “Authorised Person’s Appointment (APA) Form” (Refer to Appendix 5 for APA Form) for the Manager in Charge (detailed CV must be included with a brief description);
   11. k)List of proposed members of the Board (i.e. Directors on the Board) if it is applicable (detailed CV must be included with a brief description for each Board member);
   12. l)Paid-up capital certificate of deposit from a bank licensed in the UAE;
   13. m)Copy of the required initial approvals from the Department of Economic Development; and
   14. n)A copy of the tenancy agreement and the address of premises to carry out the business of the proposed entity.
9. 3.1.9The applicant must submit documents as per Paragraphs 3.1.8 (a) to (h) of this Chapter to initiate the application process;
10. 3.1.10The Central Bank, upon review of all documents as per Paragraphs 3.1.8 (a) to (h) of this Chapter, will notify the applicant if the initial approval has been granted or its application has been rejected by the Board of the Central Bank;
11. 3.1.11The applicant is required to submit documents under Paragraphs 3.1.8 (i) to (n) of this Chapter only after receiving the initial approval of the Central Bank;
12. 3.1.12The proposed Manager in Charge will be called in for an interview by a special committee of the Central Bank as part of a fit and proper test. The Central Bank reserves the right to issue or decline the approval for the appointment of the proposed Manager in Charge;
13. 3.1.13The Central Bank, upon review of all documents as per Paragraphs 3.1.8 (i) to (n) of this Chapter and the Bank Guarantee as per Paragraph 2.4 of Chapter 2, will notify the applicant in writing if the license to carry out the business has been granted or not;
14. 3.1.14After obtaining the license to carry out Exchange Business from the Central Bank, the Licensed Person must submit the following to the Banking Supervision Department before commencing the business:
    1. a)A copy of the notarized Memorandum and Articles of Association;
    2. b)Auditors certification that paid-up capital has been injected into the business;
    3. c)Undertaking letter from the Owner/Shareholders/Partners whereby the Licensed Person agrees to comply with paid-up capital ratio and liquidity requirements as per Paragraphs 4.1, 4.18 and 4.19 of Chapter 4;
    4. d)Duly completed APA Form (Refer to Appendix 5 for this Form) and an approval request for the appointment of the Compliance Officer and Alternate Compliance Officer. Please refer to Paragraphs 16.4.9 and 16.5.2 of Chapter 16 for further details;
    5. e)Contact details (such as mobile number, phone number, fax number and email) of the main/head office, Manager in Charge and Compliance Department or Officer;
    6. f)Application for a Letter of No Objection to appoint External Auditors as per Paragraph 7.3.2 (b) of Chapter 7;
    7. g)Business Continuity Plans;
    8. h)Copy of the insurance policy;
    9. i)Description of the IT systems, detailed back up and disaster recovery plans;
    10. j)Application for connectivity to the Central Bank reporting systems; and
    11. k)Any other information as may be specified by the Central Bank.
15. 3.1.15The Licensed Person must submit documents under Paragraphs 3.1.14 (a) to (b) of this Chapter to the Licensing Division and the remaining documents to the Supervision & Examination Division of the Banking Supervision Department; and
16. 3.1.16The Licensed Person must inform the Supervision & Examination Division and the FID (i.e. the Financial Intelligence Department which was formerly known as the AMLSCU) at least ten (10) days in advance about the date of commencement of its business.

1. 3.2.1The Central Bank reserves the right, within sixty (60) days of receiving a license application, to:
   1. a)require the applicant to provide additional documents/information that the Central Bank deems necessary to evaluate the application; or
   2. b)reject incomplete applications.
2. 3.2.2The applicant may withdraw its application at any time during the process by notifying the Central Bank in writing;
3. 3.2.3After the review of a license application, the Central Bank may advise the applicant in writing whether:
   1. a)the license has been granted unconditionally; or
   2. b)the license has been granted subject to conditions; or
   3. c)the application has been rejected.
4. 3.2.4The Central Bank will notify the applicant of the outcome of the license application within a period not exceeding twenty (20) working days from date of issuing such decision by the Board of Directors of the Central Bank. Such notice shall include the following:
   1. a)content of the decision;
   2. b)reasons for the decision, if any; and
   3. c)requirement of additional documents or information, if any.
5. 3.2.5A license certificate is issued to the applicant once the Central Bank decides to grant the license stating the effective start date of the license. The name of the Licensed Person is then added into the “Central Bank Register of Exchange Houses”; and
6. 3.2.6The Licensed Person must obtain prior approval of the Central Bank if it intends to add any permitted activity or to discontinue the current permitted activities (Refer to Paragraph 1.2 of Chapter 1 for the list of permitted activities) by submitting an application at least sixty (60) days before the date of such change.

1. 3.3.1The Board of Directors of the Central Bank reserves the right, at any point in time, to reject an application for new license or an application from an existing Licensed Person to change the category of license considering the interest of the public or if the applicant/Licensed Person fails/refuses to fulfill the licensing conditions and requirements as set out in Paragraph 3.1 of this chapter;
2. 3.3.2The Board of Directors of the Central Bank reserves the right, before issuing the rejection decision, to request the applicant to fulfill the licensing requirements and conditions within a specified period of time; and
3. 3.3.3The applicant shall be notified in writing of the Board’s decision on its application, whether approved or rejected, within a period not exceeding twenty (20) working days from date of issuance of the Board of Director’s decision. Such notice shall include the following:
   1. a)Content of the decision; and
   2. b)Reasons for rejection if any.

1. 3.4.1The license shall be valid for a fixed period of time from its date of issue and renewed thereafter upon an application from the Licensed Person (Refer to Paragraph 4.14 of Chapter 4).

1. 3.5.1The Licensed Person must maintain adequate levels of financial resources in accordance with Paragraphs 2.3 of Chapter 2 and 4.1, 4.18 and 4.19 of Chapter 4 at all times;
2. 3.5.2The Licensed Person must maintain resources, systems and controls that are, in the opinion of the Central Bank, adequate for the scale and complexity of its activities and mitigating risks of financial crime;
3. 3.5.3The Licensed Person must appoint External Auditors, subject to obtaining a Letter of No Objection from the Central Bank in accordance with Paragraph 7.3.2 of Chapter 7;
4. 3.5.4The Licensed Person’s books of accounts and other records must be available within the UAE at all times and for examination by the Central Bank or persons appointed by the Central Bank;
5. 3.5.5The Licensed Person must comply with the minimum record-keeping requirements covered under Paragraph 16.24 of Chapter 16;
6. 3.5.6The Licensed Person must act in an open and cooperative manner with the Central Bank at all times;
7. 3.5.7The Licensed Person must comply with the regulatory reporting requirements covered in Appendix 3 of the Standards;
8. 3.5.8The Licensed Person must comply with any other specific requirements or restrictions imposed by the Central Bank on the scope of its license; and
9. 3.5.9When granting a license, the Central Bank specifies the regulated services that the Licensed Person is permitted to offer. The Licensed Person must operate within the scope of its license at all times. The Central Bank reserves the right to vary existing requirements or impose additional restrictions or requirements, to address specific risks associated with the business of a Licensed Person.

1. 3.6.1The Board of Directors of the Central Bank reserves the right to suspend or revoke a license issued to a Licensed Person by issuing a written notice in the following cases:
   1. a)If the Licensed Person ceased to comply with or has breached one or more of the conditions or restrictions imposed on its license;
   2. b)If the Licensed Person has breached applicable Laws, Rules, Regulations, the Standards or any Notice issued by the Central Bank;
   3. c)If the Licensed Person has failed to take any measures or procedures determined or prescribed by the Central Bank;
   4. d)If the Licensed Person did not commence its Exchange Business within six (6) months from the issue date of license;
   5. e)If the business or operations were ceased for a consecutive period exceeding three (3) months;
   6. f)If the Central Bank considers, at its own discretion, that the full or partial withdrawal, revocation or suspension of the license, was necessary for achieving its objectives and in discharging its functions;
   7. g)If the Licensed Person has submitted an application for full or partial withdrawal, cancelation or suspension of the license;
   8. h)If the Licensed Person’s liquidity or solvency is at risk or the Licensed Person becomes bankrupt;
   9. i)If the paid-up capital of the Licensed Person falls below the minimum amount required in accordance with the Regulations/the Standards issued by the Central Bank;
   10. j)If the Licensed Person has merged with another Licensed Person or institution without obtaining a Letter of No Objection from the Central Bank; and
   11. k)If the Licensed Person’s officers, employees or representatives refused to cooperate with Central Bank officers, Representatives, Examiners or abstained from providing unhindered access to information, statements, documents or records.
2. 3.6.2The Central Bank shall notify the Licensed Person, with reasons in writing, about its decision to withdraw, cancel, suspend or revoke the license within a period of not exceeding twenty (20) working days from date of issuance of the Board of Director’s decision. The notice shall include the following at a minimum:
   1. a)Content of the decision;
   2. b)Reasons for the decision, if any; and
   3. c)Effective date of the decision.

1. 3.7.1The Licensed Person is not permitted to open new branches without obtaining a license from the Central Bank;
2. 3.7.2The Licensed Person has to submit an application signed by its authorized signatory to the Licensing Division of the Banking Supervision Department in order to obtain licenses to open new branches; and
3. 3.7.3The Central Bank, at its sole discretion, shall issue licenses to open new branches based on the level of compliance of the Licensed Person with applicable Laws, Rules, Regulations, Notices and the Standards and based on the prevailing policy of the Central Bank in issuing such approvals.

1. 3.8.1The Licensed Person is not permitted to relocate its licensed premises without obtaining the Letter of No Objection from the Central Bank;
2. 3.8.2The Central Bank shall issue a Letter of No Objection to relocate the licensed premises based on the level of compliance of the Licensed Person with applicable Laws, Rules, Regulations, Notices and the Standards, and based on the prevailing policy of the Central Bank;
3. 3.8.3The Licensed Person must display a notice outside the current location two (2) weeks prior to the relocation of the licensed premises for the information to customers mentioning therein the address of the new location, proposed date of opening and the new contact number; and
4. 3.8.4The Licensed Person must operate its business from the existing location, unless otherwise agreed by the Central Bank in writing, until it receives all necessary licenses (such as the license issued by the Central Bank, Department of Economic Development etc.) for such relocation.

1. 3.9.1The Licensed Person may close its licensed premises in case of any unforeseen incidents (example: a fire, system failure, etc.), due to natural disasters or for some specific purposes (examples: to carry out repairs or any maintenance) subject to the following conditions:
   1. a)The Licensed Person must notify the Central Bank of the closure immediately upon closing the licensed premises with reasons thereof;
   2. b)The licensed premises shall not be closed for a period of more than one (1) month; and
   3. c)A notice must be displayed outside the premises stating the reasons for the closure, expected re-opening date, mobile number of the contact person and contact details of the nearest branch of the Licensed Person, if any.
2. 3.9.2The Licensed Person must obtain a Letter of No Objection from the Central Bank to keep the licensed premises closed for a period exceeding one (1) month subject to the following conditions:
   1. a)The maximum period of closure shall not exceed three (3) months;
   2. b)Liabilities towards customers must be cleared prior to the closure;
   3. c)A notice must be displayed outside the premises with the reasons for the closure, expected re-opening date, mobile number of the contact person and contact details of the nearest branch of the Licensed Person, if any.
3. 3.9.3The Licensed Person must discuss with the Central Bank about the status of its licensed premises before the expiry of the previously approved period of temporary closure (i.e. three months); and
4. 3.9.4The Licensed Person must obtain the Letter of No Objection from the Central Bank in order to close a licensed premises permanently.